Friday, March 29, 2013

Clearwire taps Sprint funds, boosting deal prospects

(Reuters) - Wireless service provider Clearwire Corp said it would draw on $80 million in financing from Sprint Nextel Corp , which is seeking to buy it, reducing the chances for rival bidder Dish Network Corp .

Clearwire, which is already majority owned by Sprint, said on Wednesday that it would continue talks with Dish but that it has not changed its recommendation in favor of its agreement with No. 3 U.S. mobile provider Sprint.

"We anticipate filing our definitive proxy in the coming weeks," Clearwire Chief Executive Erik Prusch said in a filing.

Clearwire's latest comments did not appear to bode well for its shareholders' demands for a higher price tag than Sprint's $2.97 per-share offer or for Dish's counter-offer. The satellite company run by billionaire founder Charlie Ergen had said that its $3.30 per-share bid for Clearwire was conditional on Clearwire not drawing on Sprint's convertible debt offer.

"Every month that they draw down on that $80 million gives Sprint more stock and is another nail in the coffin of a prospective Dish deal," said D.A. Davidson analyst Donna Jaegers. Dish was not immediately available for comment.

Many Clearwire shareholders said they were unhappy with the Sprint offer, which would need approval from the majority of Clearwire's minority investors.

Sprint's December deal to buy out Clearwire included the option for the smaller company to draw on $800 million in convertible debt in 10 monthly installments.

Clearwire, which also drew on the financing in March, had declined the offer in January and February because it was considering the Dish offer.

Clearwire said on Wednesday that it has not made any decisions about whether it would accept future installments of the Sprint money.

It did not explain on Wednesday how it could continue talks with Dish despite its apparent flouting of Dish's condition that it reject's Sprint financing.

The financing is in the form of debt that will be convertible to Clearwire shares in the event that its shareholders vote against Sprint's offer.

So every installment that Clearwire accepts would further weaken its minority shareholders' clout in the future.

However, Clearwire's shares were still well above the Sprint offer price at $3.24 when the Nasdaq closed on Thursday, indicating that many shareholders were still hoping for a better deal.

(Reporting by Sinead Carew, additional reporting by Nicola Leske; Editing by Gerald E. McCormick, Maureen Bavdek and Richard Chang)

Source: http://news.yahoo.com/clearwire-taps-sprint-funds-boosting-deal-prospects-210741860--sector.html

2012 oscar winners channel 3 news j lo j lo sacha baron cohen ryan seacrest octavia spencer meryl streep oscars

No comments:

Post a Comment

Note: Only a member of this blog may post a comment.